Rupee remained unchanged on Tuesday and ended the day at 82.6662 versus the dollar. The Indian rupee has essentially been flat over the previous week, as we predicted. This happened in spite of solid foreign investment and falling crude oil prices.
The net inflows of foreign portfolio investors were close to $600 million in the previous week, according to figures from the NSDL (National Securities and Depository Ltd.). Moreover, recent declines in the value of the dollar and the cost of crude oil. The risk-off attitude brought on by the financial crisis is what is causing the rupee to weaken. However, prospects exist for the household unit to stage a recovery in the future.
On Monday, the dollar index (DXY) fell beyond the support level of 103.5. This has raised the likelihood of an additional fall. The first level of support is at 101.50, and the second is at 100.8. Generally, the bias will be against the dollar, which can support the rupee.
The price range of 82.15 to 82.70 was where the rupee was doing well. The candlesticks from the previous two days do, however, suggest some buying. So, given that the rupee is presently trading at 82.67, a rise to 82.15 is possible in the upcoming week. In case of a breach, it can reach 81.80. The price range between 83 and 83.10 can, nevertheless, offer solid support if there is a downturn. If these levels are broken, there may be a sharp decline, perhaps to 84.
In the next days, the rupee is likely to gain momentum and rise as the dollar continues to lose strength. We expect the Indian rupee to increase to 82.15. Also possible this week is a sustained climb to 82.
